Despite Rhine water levels mitigating access to propane barges, German access to resources is seemingly improving, with railcar usage starting to revive as more railcars are slowly starting to be incorporated alongside trucks for propane delivery, and as Nord stream 1 begins operations again.
LPG imports into Germany have steadily improved over the weeks. Currently Germany is importing 36,000 mt of LPG from Northwest Europe and the United States, according to Kpler shipping data July 25, an improvement since the last update, when Germany was importing only 17,000 mt of LPG from Northwest Europe, recorded on July 14.
Meanwhile, German exports have nearly tripled since June, when the supply from Nord Stream 1 was cut off.
The Rhine water levels continue to remain low, further driving the impact of less barges being able to transport LPG product. Sources pointed to increased costs from barges only able to load minimal portions of LPG at a time.
While the Rhine situation persists, Nord Stream 1 has reopened after a prolonged period of maintenance, with an LPG distributor pointing to the improved natural gas supply. "Nord stream back up and running, several days ahead of schedule, there is plenty of gas now and it seems to be returning to pre-maintenance levels", the LPG distributor said, adding that he expected natural gas prices to go lower as supply starts to accrue.
Natural gas prices remain elevated but have fallen since the last update when they were assessed at $44.295/MMBtu July 13. The Platts DES Northwest Europe Marker for September was assessed at $40.429/MMBtu July 22, or a $8.4/MMBtu discount to the September TTF hub price, up $2.196 on the day.
The source had previously mentioned trucks were being used as an alternative solution to the lack of railcars in Germany. The source explained on the day that although there are not many railcars, the issues previously encountered have been dealt with and railcars are slowly starting to become available for delivery. Propane deliveries are being negotiated by means of railcars and trucks.
"Everything is now okay with railcars, although they are not loaded yet and there are not many of them, there is enough product for now and we are able to transport propane by Railcars and trucks. However, there are not enough drives for the trucks", the market source added.
Despite steadily improving in-land transportation and now supply of natural gas entering the region, sources are still uncertain about the market's landscape. "There is enough product for now, Germans are filling up their storage, however, demand from the heating market has not started yet", the in-land source mentioned. The source expects the impacts from demand to be present within the coming few weeks.
Other in-land sources pointed to a difficult Winter ahead with a potential lack of supply awaiting the region.
Platts assessed propane FCA ARA at $762/mt July 22, down $5/mt on the week and down $5/mt from the previous update, when it was assessed at $767/mt July 13, according to S&P Global Commodity Insights data.